The year 2013 has been good for investors in solar companies listed on the US stock market. Manufacturers like SunPower, Yingli, Jinko, First Solar, ReneSola and Trina have all had a spectacular bull run with share values of companies like Trina more than tripling over the year. SolarCity, the rising star of distributed installations in the US, has seen a five-fold jump in stock price. All this is good news for the market as a whole as well. The global solar market seems to have now stabilized from its over-capacity in 2012 and 2013. New installations in 2014 are expected to grow beyond 40 GW, largely driven by the US, China and Japan.

• Jinko recently announced that it would completely separate its projects business from the manufacturing business
• Stock prices of Indian solar companies had been in a free fall during the greater part of 2013 until the announcement of Domestic Content Requirement (DCR)
• Improving global demand for solar is likely to help with export that has been the lifeline of manufacturers in India

Due to over-capacity and dwindling margins, most large global manufacturers had to integrate downstream into project development to create an in-house demand for their modules. Now, these companies are viewing their project development businesses as a separate opportunity in itself. As an example, Jinko recently announced that it would completely separate its projects business from the manufacturing business and it will acquire a 500 MW production line, currently owned by Topoint Group (refer).

This global trend is currently not replicated in India. Even though India has grown to become a 1 GW market in 2012 and 2013, domestic manufacturers haven’t been as lucky as their international counterparts. The stock prices of the few publicly listed companies like Moser Baer, IndoSolar and Webel Energy had been in a free fall during the greater part of 2013, until the announcement of Domestic Content Requirement (DCR) for phase two of the NSM provided a small relief rally. This too is fizzling out in the early days of 2014.

Despite a couple of bad years that have inflicted a lot of damage on some of the manufacturers, some of whom were even forced to shut down manufacturing lines, there is still a silver lining. DCR is expected to provide these manufacturers some breathing room and allow the closed cell capacity to restart again. Over and above that, the improving global demand is likely to help with export that has been the lifeline of manufacturers in India to begin with.

This post is an excerpt from this week’s INDIA SOLAR WEEKLY MARKET UPDATE. Sign up to our mailing list to receive these updates every week.

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